In: Accounting
Box Company budgeted to sell 226,000 units of Zbox in September. Production of one unit of Zbox requires three pounds of aluminum and five pounds of steel powder. The beginning inventory and the desired ending inventory are as follows:
Beginning Inventory | Desired Ending Inventory | |||
---|---|---|---|---|
Zbox | 37,000 | units | 26,000 | units |
Aluminum | 43,000 | pounds | 36,000 | pounds |
Steel powder | 39,000 | pounds | 44,000 | pounds |
How many pounds of steel powder does Box Company need to purchase during September if Box plans to manufacture 163,000 units of Zbox in September?
Pounds of steel powder does Box Company need to purchase during September if Box plans to manufacture 163,000 units of Zbox in September
= Required steel powder pounds + Ending steel powder pounds - Beginning steel powder pounds
= (1,63,000 units*5 pounds per unit) + 44,000 pounds - 39,000 pounds
= 8,20,000 pounds
Pounds of steel powder does Box Company need to purchase during September are 8,20,000 pounds.